Secondary Market Annuities- Video Series

The Real Story Behind Secondary Market Annuities

Why Wall Street firms spend hundreds of millions buying these same payment streams

Welcome- At this point, you’ve seen the webinar about secondary market annuities, and are preparing for our consultation call.

You’re probably thinking: ‘This sounds too good to be true. Higher yields from the same insurance companies? Why haven’t I heard about this before?’

Those are exactly the right questions to ask. So the videos below give you the complete story behind this market – where it comes from, why it exists, and why Wall Street firms spend hundreds of millions buying these same payment streams while keeping individual investors in the dark.

So take a few minutes to jump into this exciting fixed income alternative marketplace so that when we do speak, you’ll have a solid understanding of how the market works, and we can discuss specifics of how it can work for you in your portfolio. Enjoy!

Intro Video:
What It Is in 3 Minutes or Less

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What It Is: The 3 Minute Summary

Are you approaching retirement or already there? If the idea of guaranteed income arriving like clockwork—what I like to call “mailbox money”—sounds appealing, but you hate the idea of complex annuities loaded with riders, fees, and subpar returns, then I have something unique for you.

In a hidden corner of the financial world, there’s a small but powerful marketplace known as Secondary Market Annuities. This is where payment streams from top-rated insurance companies like MetLife, Berkshire Hathaway, Prudential, and others—only the best of the best—are available at wholesale prices.

Here’s how it works:
There’s a segment of the insurance world called structured settlement annuities, where these top-rated companies make settlement payments to individuals as compensation for personal injuries. Like I said a second ago, these payment streams are rock-solid and backed by the most trusted names in the industry.

But sometimes, life happens, and people need cash now instead of waiting for the future payments from their structured settlement. Because of strict IRS laws, these people can’t simply cash in their settlement annuity payment streams. However, they can sell their rights to these payments—following structured settlement transfer laws in every state that must be approved by a court to comply with IRS guidelines.

This creates a unique opportunity in a niche marketplace. It’s small—less than a billion dollars a year—but it’s been around for decades. While Wall Street sharks scoop up most of the inventory, there’s still room for individual investors like you to benefit.

Video 1:
Intro To SMAs

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Intro: What Are Secondary Market Annuities?

In this video, I’ll give you a quick understanding of just exactly what these higher yield, fixed income alternative investments are and how they benefit you, so you can quickly determine if these are something you want to explore further, which you can then do in the next videos.

- What are Secondary Market Annuities
  1. Period certain, guaranteed payment streams
  2. Come from structured settlement annuities
  3. Right to receive payments changes hands, not annuity itself
  4. State and federally regulated transfer process adhering to IRS statutes
  5. Payments assigned by court order into a transaction specific dedicated escrow account at the GoldStar trust, the federally regulated bank and trust company payment servicer
    1. That payment servicing account is transferred to you
    2. Payment servicer handles splits and allocations of payments buyers
    3. You can re-assign your payment stream to your heirs or a third party directly with the payment servicer- not restricted by DCF or subject to any transfer issues
    4. Can be sold- DCF routinely buys back from customers or heirs, prices depend on current market interest rates however.
  6. Can be acquired by buyers of any age, in any state, and with qualified and non qualified funds, in the name of an entity, a trust, or individually owned.
  7. As noted above, payments can be split/ allocated to suit your needs
    1. Examples
      1. A portion of a larger case to suit your available funds.
        
        A $50,000 portion of a larger priced lump sum
        
        A purchase price calculated to achieve $1000/ month out of a larger monthly income stream
        
        An income stream that starts at a specified date in the future
      2. A combination of multiple streams to achieve a desired portfolio outcome
        
        Income and lump sum
        
        capital replacement
        
        Planned capital events over time
        
        Portfolio stability and flexibility
        
        Staggered lumps over time
        
        College planning
        
        Life insurance premium payments
        
        Property maintenance and capital reserves
        
        Long term stable fixed income without specific monthly income needs
        
        Rising income-
        
        Layer in step ups in future
        
        Combine multiple streams for larger monthly income
- Pros and Cons:
  1. Not for Everyone
    1. You need to be comfortable making your own decisions about alternative investments
  2. Not well known
    1. Small market, under $1B/ year
  3. Benefits
    1. Higher Yield
    2. Lower Price
    3. Lower Risks than managed portfolios and many other options
- Next Videos
  1. Why It’s Better
  2. How Others Use It
    1. Case Studies
  3. How to Choose
    1. Inventory page, terminology, etc
  4. Purchase Process
    1. Documents and Timelines

Video 2:
Why Secondary Annuities Are Better

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Why These Payments Are Better

It’s important know why these are better than other comparable options out there so you can compare apples to apples and make an informed decision if these are something you want to include in your portfolio.

Higher Yield on fixed income = better outcome
1. Use higher yield guaranteed payments to create a better portfolio outcome when compared to all bonds, or 60/40 mix, or CD’s
  1. Safer fixed income at wholesale pricing
2. Lower overall portfolio risk
  1. Sequence of returns risk
  2. Reverse dollar cost average risk
  3. Market volatility risk
  4. Withdrawal rate risk
3. Use Secondary Market Annuities for your core income and safe money needs
  1. Solid foundation allows you to safely allocate remainder assets to growth
  2. With less drag from lower yield fixed income, and no risk to growth assets from systematic withdrawals, you have better overall portfolio performance
More income, more stability, more overall output
Compare To:
- 60/40 managed money
- To Bonds
- To CD’s and Annuities
Look a the downloads page of inventory to see some of these concepts detailed
1. handouts
2. flyers
3. buyers guide
What is the outcome you seek?
1. 1. Income Now
  2. Income Later
  3. Income Options

In the next video I go through a variety of ways people like you have used these payment streams. Seeing These examples may help you determine what you want or need.

Video 3:
How To Use Secondary Market Annuities

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How To Use Secondary Market Annuities

So in this video, we’ll explore a bit more about How To Use Secondary Market Annuities. I hope this gives you some insight into how other customers and investors like you have used these period certain fixed income alternative assets so you can determine if they are something you want to explore further as a part of your portfolio.

Case Studies of planning situations
1. Immediate Income
2. Deferred Income
3. Lumps
Typical use is for retirement income
1. One or more cases
2. Filling the gap
3. Do you need lifetime income?
Portfolios
1. Examples of multi case portfolios
Different Planning Scenarios
1. Private pension funds
2. Managed money alternative assets HOA’s
3. Inheritance planning
4. Life insurance funding
5. College planning
6. Settlements and child support
7. Special needs trusts

What is the outcome you seek?

Income Now
Income Later
Income Options

When you know what you want/ need, the next step and the next video is all about the details of the case selection process and using the website.

Video 4:
How To Choose Payments

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How to Choose Secondary Market Annuities

This video is all about the details of selecting your payment streams. What it’ll do for you is give you a thorough understanding of how the whole process works so that when you do decide to buy a case, you’ll know exactly what to expect.

- Terminology
  1. A payment stream is also referred to as a “Case”
  2. Each case is transferred in a legal procedure compliant with state specific consumer protection statutes and IRS guidelines
  3. A court approves the seller’s sale of a payment, and the carriers are parties in these the court transfer cases
  4. What you buy is the right to receive these payments, transferred via a final, unappealable court order
- Selecting cases from Inventory
  1. In Stock- Available for Immediate sale
  2. In Review- Approved, in legal review, and available in +/- 1 week
  3. In Pipeline- Not yet court approved, may not become available
- All payments are guaranteed, unless specifically noted as “Insured
- Split case or tailor to your needs
  1. Acquire just a portion of an income streams
  2. Acquire just a portion of a lump sum
- Downloads
  1. Illustration
  2. Reservation form
  3. Payment Schedules
- 48 Hr hold
  1. Email, text or call to place a hold
- Calculator
  1. Time value of money
  2. Prices shown are calculated as of an assumed closing date
    1. Final pricing determined as of day we have good funds
- All about taxes
  1. Calculation methods
  2. Tax deferred accumulation
  3. Payments table
- FAQ’s
  1. What if…{bad thing happens}?
  2. What is in a closing book collateral file?
  3. What if a payment is late? Who do I call?
  4. What about taxes?
  5. What about he heirs and beneficiaries?
  6. What if I need money back/ liquidity?

Now that you know what these are, what they’ll do for you, and how to choose them, the next step is to think about the outcome that you seek. Do you need Income Now, Income Later, or Income Options?

When you know what you want/ need, you can go through the inventory and choose cases that work for you, and when you’re ready, the next step is to get the details of the purchase process so you know exactly what to expect. And that’s the next video…

Video 5:
The Purchase Process

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How to Buy- Details of the Purchase Process

This video goes over the details and what to expect when buying Secondary Market Annuities. It’ll give you a thorough understanding of the documents, process, and paperwork, so you will know exactly what to expect with no surprises!

In prior video we went over how to select your case from inventory. Once you have selected…

How are you buying?
1. If Qualified Funds
  1. IRA setup and funding process
2. If Non Qualified Funds
  1. Know the timing of availability of your money
3. so you can pick appr
48 Hr hold
1. Email call or text to place hold
Reservation
1. Form or email
2. Buyer profile in database
What’s in Close book
1. Assignment and servicing agreements
2. IRA DOI if applicable
3. Disclosure statement
4. Amort schedule
5. Background Collateral file
Pricing to an assumed close date
1. We need to know method of payment to determine timing
2. Wire transfer or cashiers check preferred
Delivery of close book
1. Docusign
2. E signature
3. Parties involved
Funding
1. Wire Transfer
2. Cashiers check
3. Problems with personal checks
Ongoing policy service
1. DCF payment tracking service
2. US mail to GoldStar means occasional delays
3. Dedicated GoldStar support phone #
Heirs and assigns
1. Beneficiary designation in IRA
2. Wills / Trusts
What about taxes
1. Three methods, examples, download page
Recap some FAQ from prior videos:
1. What about payment servicing/ what if GS goes BK
2. What are the fees
3. Who to call if payments are late
4. What about taxes
5. What about heirs

Reach out to us if you’d like to:

Schedule a 1-on-1 video call to discuss your specific needs and situation
Ask questions about products, carriers, or Secondary Market Annuities in general
Discuss how Secondary Market Annuities may (or may not) fit into your portfolio

Nathaniel M. Pulsifer, President, DCF Exchange and SecondaryAnnuities.com
(800) 246-1932 | [email protected] | Linkedin

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The Real Story Behind Secondary Market Annuities

What It Is: The 3 Minute Summary

Intro: What Are Secondary Market Annuities?

Why These Payments Are Better

How To Use Secondary Market Annuities

How to Choose Secondary Market Annuities

How to Buy- Details of the Purchase Process

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